US-China Trade Tariff Truce Rolls Over, Markets Await July CPI Impact

Global markets showed cautious optimism following the expected 90-day rollover of the U.S.-China trade tariff truce, which prevented a return to triple-digit tariffs and maintained levies of 30% on Chinese exports to the U.S. and 10% on U.S. imports to China. Investors are now focused on the upcoming July U.S. consumer price index (CPI) report, with expectations that inflation ticked up slightly to 2.8% annually and core inflation to 3.0%, driven by tariff-sensitive goods. This inflation data is critical as it will influence market assumptions about a potential Federal Reserve interest rate cut next month amidst concerns about the jobs market and Federal Reserve board changes. Meanwhile, Wall Street futures were steady and bond market volatility remained at three-year lows, reflecting investor caution ahead of the CPI release. President Donald Trump has urged China to increase soybean purchases and, in an unusual development, tech companies Nvidia and AMD agreed to share 15% of their revenue from sales of advanced AI chips in China with the U.S. government. Additionally, Bitcoin surged to near-record levels following an executive order enabling crypto holdings in U.S. retirement accounts, while broader macro markets awaited further developments including the upcoming U.S.-Russia summit in Alaska.